Commissioner Finkelstein lashes Crown at royal commission
As public hearings at the Victorian royal commission into Crown Resorts begin to wind down, Commissioner Ray Finkelstein has made a damning assessment of the casino giant.
The Age reports that Commissioner Finkelstein said the inquiry has found illegal and unacceptable behaviour at every level of the casino giant.
“I see evidence of misconduct or unacceptable behaviour from people high-up and low down and in-between,” he said while questioning Crown Melbourne chief executive Xavier Walsh on the first day of the inquiry’s final week of hearings.
“Wherever I look, I see not just bad conduct but illegal conduct, improper conduct, unacceptable conduct and it permeates the whole organisation.”
Commissioner Finkelstein said that has included junior hotel staff filling out fake invoices so Chinese patrons could illegally buy casino chips on their credit cards; probable money launderers brining huge bundles of cash into the casino without intervention; and senior executives concealing a probable tax underpayment to Victoria of up to $272 million.
“What do I do about that?” he asked.
Mr Walsh said there had been “enormous change” in the company following the Bergin inquiry in New South Wales, which found Crown unfit to hold its Sydney casino licence and triggered a mass exodus of directors and executives.
But Commissioner Finkelstein said that rather than just a personnel change, Crown needed to properly reflect on how things had gone so badly wrong at the company and change “the way people have done business with the organisation at all levels probably for the last 20 years”.
Mr Walsh, a senior executive at Crown Melbourne since 2013, said he felt “desperately” for frontline staff who had not been properly led.
“I share responsibility for that. But…as an organisation, you have to start somewhere, and I believe we’ve made that start.”
Potential tax underpayment uncovered after wrong documents sent to commission
Earlier, the commission heard that Crown decided not to tell Victoria’s gambling regulator it may have been cheating on its taxes by deducting marketing expenses, such as free food and drinks for players, from its poker machine revenue because it did not think the watchdog would notice.
The possible underpayment, which has been estimated at as little as $8 million and up to $272 million, only came to the attention of the Victorian regulator and the royal commission because details were sent to the inquiry by accident, counsel assisting Adrian Finanzio said.
Mr Walsh said he first became aware of the practice in 2018 when he read a 2012 memo explaining that it probably “will not be noticed” by the Victorian Commission for Gaming and Liquor Regulation given other changes to Crown’s tax rates at the time.
Commissioner Finnkelstein asked Mr Walsh why “this kind of deception didn’t worry you enough in 2018 to do anything about it?”
Mr Walsh said he took “too much comfort” in the fact that the regulator looked at the deductions in 2018 and “didn’t ask any further questions”.
However, he later conceded the issue did not get a “full airing” by the regulator, which only learnt Crown had probably been dodging Victorian tax since 2012, when it was raised at a commision hearing on June 7.
The commission ordered Crown to provide a full list of potential legal and regulatory breaches but the possible tax underpayment was not included in the first two tranches of documents sent in response.
Mr Finanzio asked Mr Walsh how anyone would have learnt about the possible rort if Crown’s pokies boss, Mark Mackay, had not accidentally sent the commission his calculations of the size of the possible underpayment, among documents to responsible gambling.
Mr Walsh said the company was extremely busy preparing for the commission and would have hoped it was disclosed eventually.
He said he first raised the tax issue with Crown’s executive chair Helen Coonan on February 23, the day after Victoria’s royal commission was announced.
The royal commission is set to conclude public hearings on July 9, with senior figures including executive chair Helen Coonan to give evidence.